On December 14, 2102 the U.S. Department of Labor's (“DOL”)’s Bureau of International Labor Affairs (“ILAB”) introduced “Reducing Child Labor and Forced Labor: A Toolkit for Responsible Businesses” (“the Toolkit”), the first guide developed by the U.S. government to help businesses combat child labor and forced labor in their global supply chains.   Multi-national businesses have long been faced with the challenge of ensuring such practices are not conducted in their global operations or supply chain processes.  Many of these companies are currently involved in efforts to combat child and forced labor on an international basis through numerous governmental and philanthropic programs. 

The Toolkit, which can be downloaded at no cost at http://www.dol.gov/ChildLaborBusinessToolkit, provides information and resources to help companies combat such practices.  The DOL unveiled the Toolkit during an event at its Washington, D.C. headquarters for representatives of government, industry, labor and civil society organizations active in efforts to prevent labor abuses in the production of goods.

In a video message announcing the Toolkit, Secretary of Labor Hilda L. Solis stated, "[e]ncouraging businesses to reduce child and forced labor in their supply chains helps advance fundamental human rights that are at the core of worker dignity, whether here in the U.S. or abroad”.
Since 1995, the U.S. Congress has provided funding to ILAB for programs aimed at combating child labor internationally.  ILAB has used these funds to implement more than 250 projects in over 90 countries, in partnership with a variety of governments, international institutions, civil society organizations and industry groups.

The Toolkit was created by the ILAB as part of its responsibility under the Trafficking Victims Protection Reauthorization Act of 2005.  The Toolkit focuses on the need for companies to create social compliance programs that integrate the ILAB’s policies and practices to ensure the business entity acts to prevent child labor and forced labor throughout its supply chain.  The Toolkit provides step-by-step guidance on the following eight critical elements to aid companies that do not currently have social compliance systems in place or those interested in strengthening existing systems:  1) engaging stakeholders and partners; 2) assessing risks and impacts; 3) developing a code of conduct; 4) communicating and training across the supply chain; 5) monitoring compliance; 6) remediating violations; 7) ensuring independent review; and 8) reporting performance.

Child Labor.  The International Labor Organization (“ILO”) estimates there are 215 million children in child labor worldwide, 115 million of them in hazardous forms of work. It also estimates that 21 million people are in forced labor, six million of them children.  
Child labor includes instances of children (minors under age 18) working in the worst forms of child labor (“WFCL”) as described in ILO Convention 182, as well situations where children engage in work that is exploitative and/or interferes with their ability to attend school.   Some examples of WFCL are:   1) all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including forced or compulsory recruitment of children for use in armed conflict; 2) the use, procuring or offering of a child for prostitution or pornography, or for illicit activities, in particular for the production and trafficking of drugs; and 3) work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children.

Forms of work identified as "hazardous" for children may vary from country to country.   ILO Recommendation No. 190 states that in order to determine hazardous work for children and  identify where such situations occur, consideration should be given to:  1) work which exposes children to physical, psychological, or sexual abuse; 2) work underground, under water, at dangerous heights or in confined spaces; 3) work with dangerous machinery, equipment and tools, or which involves the manual handling or transport of heavy loads; 4) work in an unhealthy environment which may, for example, expose children to hazardous substances, agents or processes, or to temperatures, noise levels, or vibrations damaging to their health; and 5) work under particularly difficult conditions such as work for long hours or during the night or work where the child is unreasonably confined to the premises of the employer.  [ILO Convention 182, Section II, Paragraph 3].
According to the Toolkit, child labor spans nearly every sector and kind of work, including harvesting cotton, working as domestic servants, and mining diamonds. The Toolkit mentions it is important to recognize that not all work performed by children is exploitative.   For example, children of legal working age who perform work that does not hinder their mental, physical or emotional development, such as performing household chores and working in non-hazardous activities after school, can be an asset to their families' welfare and their nations' economic development. 

Forced Labor.  The ILO estimates that 20.9 million people are currently victims of forced labor globally.  Of these individuals, 4.5 million are in forced commercial sexual exploitation and 14.2 million are in other forms of labor exploitation spanning sectors such as agriculture, construction, domestic work and manufacturing.  The remaining 2.2 million people are in state-imposed forms of forced labor.

ILO’s defines forced or compulsory labor” in ILO Convention 29 to include "all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily."  “Menace of any penalty” means that a workers believe they will face a penalty if they refuse to work. "Menace" means the penalty need not actually occur; threats of penalty may be sufficient if the employee believes the employer will exact the penalty.  A wide variety of penalties exist which fulfill this element of forced labor, including:  confinement to the workplace; violence against workers or their family members; retention of the employee’s identity documents; dismissal from employment; and non-payment of wages.  A worker can be considered to be in forced labor even if he or she consented to work, if the consent occurred through the use of force, abduction, fraud, deception or the abuse of power or a position of vulnerability, or, if the individual has revoked his or her consent.  According to the Toolkit, forced labor can happen in any industry, but is especially prevalent in industries that require low-skilled labor, such as agriculture and mining, or occupations hidden from public view, such as domestic service.

Reasons companies develop social compliance systems.  The Toolkit lists a number of reasons that motivate employers to develop social compliance systems to combat child or forced labor, including: 

• complying with existing laws such as the Dodd-Frank Act and the Consumer Protection Act;
• meeting public expectations of a companies’ control over labor standards and human rights in their supply chains through voluntary standards such as the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises;
• maintain eligibility for loans from the U.S. Government through programs such as Overseas Private Investment Corporation, which require compliance with specific labor and environmental standards, including standards on child and forced labor;
• recruiting and retraining employees; and
• doing good.

Examples of Government and Industry Projects.  The following are a few examples of government and industry programs aimed at combating global child and forced labor:

• The Better Work program, a joint initiative of the ILO and the International Finance Corporation, is designed to improve labor practices and productivity in the international apparel sector. Better Work is a transparent factory monitoring program conducted by a credible monitor, the ILO, in participating countries.
• ManpowerGroup, a global employment services firm, supports a program in Medillin, Colombia called Jόvenes Visionarios, which helps abandoned and at-risk youth through counseling, training and employment support.  Through one of its sub-projects, Manpower has partnered with the International Organization of Migration to identify youths approaching 18 years of age who will no longer be supported by government assistance.  This project provides these youths access to training facilities, equipment, instructors, courses, vocational assessments and career guidance, as well as psychological counseling.
• In its Mewat Program, Gap Inc. formed a multi-stakeholder group with the Government of India, suppliers, a local training institute and a local nongovernmental organization (“NGO”).  The group designed a program involving 20,000 women who do handwork in their homes or at local community centers.  The women work at home bring their finished products to the community centers for pick-up, which increases efficiency for suppliers.  The local NGO coordinates monitoring of working conditions as well as payment to the workers, who are also provided free training to upgrade their handwork skills.

Brazilian Basics

As a leading and influential economy in Latin America (and the world), Brazil is an attractive country for employers and employees.  Among Brazil’s positive attributes are its rich and warm culture, amazing sites, trendy fashion, and great food!  Brazil’s vast and vibrant economy sources include natural resources and raw materials, solar energy and other forms of alternative energy, tourism, manufacturing of numerous consumer products, agricultural goods, and environmental science services and technology.  Indeed, Brazil led in the creation of Mercosur, the Free Trade Area of the Americas (FTAA), and he Group of 20 (G-20) coalition that represents developing country interests in the Doha Development Round of the World Trade Organization (WTO) negotiations.  However, companies, including multi-national entities, doing business or planning to do business in Brazil should become knowledgeable about this country’s generally employee-friendly employment and benefits laws.  Here, we discuss the fundamentals of Brazil’s employment laws, and some issues to follow to stay up to date.

Created in 1943, Brazilian labor and employment laws are directed by the Consolidacao das Leis do Trabalho (CLT) in conjunction with the Federal Constitution of 1988.  The CLT consists of over 900 articles and provides legal standards in the following areas:

  • Workplace Safety
  • Working Hours
  • Minimum Wage Requirements
  • Vacation Time
  • Employment Contracts
  • Protection for Women and Children
  • Worker’s Health Regulations
  • Union Organization and Union Fees *

The CLT also established the legal framework for the Brazilian labor courts system and related agencies, and provides for rules and procedures for labor and employment proceedings.  Since 1988, the CLT is interpreted and implemented hand-in-hand with the Federal Constitution of 1988.  The institution of the Federal Constitution of 1998 introduced new labor rights, as well as enhanced certain standards provided in the CLT.  Utilized in conjunction, the CLT and the Federal Constitution of 1988 provide rules and legal standards in the following areas:

  • Minimum Wage
  • 44 hour work week (8 hours a day)
  • Irreducibility of Wages
  • Unemployment Insurance
  • 13th Month Salary (also known as Christmas Bonus)
  • Profit Sharing
  • Overtime Compensation
  • Annual Vacation requirements
  • Maternity and Paternity Leave
  • Prior Notice of Dismissal
  • Retirement Benefits
  • Industrial Accident Insurance
  • Right to Strike
  • Pregnancy and Work Related Injury Leave
  • Executed Work Document (known as the Carteira de Trabalho e Previdencia Social)
  • Compensation of Commissions
  • Premiums (for night-shift, risk of work, transfers)
  • Allowances (for family, education, food vouchers)
  • Daycare Benefits
  
Under Brazilian law, an employer is anyone or any entity that assumes the risk of economic activity, and hires and manages personnel.  An employee is any person providing services to an employer on a regular basis and receives a salary.  Under this broad scope of employer-employee relationship, Brazil recognizes six types of working relationships:

Celetista

This is an employee who has a written and signed Carteira de Trabalho e Previdencia Social (CTPS) with an employer, which then requires proprt recordkeeping of all employment and payroll information, including but not limited to, job position, job description, salary, benefits provided (e.g. health care), contributions (e.g. social security), and taxes paid by the employer.  Based on Brazil’s ‘principle of continuity’ of employment , the general rule is that the CTPS is entered into for an indefinite time period.  An employment for definite period of time is an exception to the rule, and is permitted in limited circumstances (e.g. the nature of the work justifies the foreseeable period of time or if the contract is for the performance of a specific project). 

Trabalhador Cooperado

This is when an employee becomes a cooperative (or partner) of an employer.  Once an employee becomes an cooperative, the employee is no longer governed or managed under a CTPS, but instead follow the cooperative’s own statute or governing laws.  Depending on the employer, some cooperatives may perform work similar to employees but are in reality cooperatives of the employer. 
 
Trainees
 
Trainees are recent graduates entering the professional world, and more often then not, enter into a CTPS with the employer.  As trainees are new to the work force, they are provided training for the position they will eventually hold.

Interns

Interns are students at public and private academic institutions, which include high school, technical school, and higher education, who are hired on a part-time basis.  Interns can only work up to six hours a day and the part-time job position must be related to the major or a substantive course they are taking at their academic institution.  Interns receive paid vacations and transportation benefits/reimbursements under the law, and no other benefits are legally required.

Self-Employment

Self-employment is defined as any person who performs work or provides services to one or more companies without a traditional celetista employment relationship.  This usually includes independent contractors, if one is truly an independent contractor, because a self-employed person does not take directives from anyone, and provides services at his or her own costs and risks without fixed working hours.  A self-employed person is not entitled to benefits, such as paid vacations, 13th month salary, or meal and transportation reimbursements.

Domestic Worker

A domestic worker is a person providing services to a domestic household or individual.  The CLT provides specific rules and regulations for domestic workers, and are entitled to many of the benefits required by law for celetista employees, with some exceptions. 

Under these six types of working relationships, employers must ensure that they comply with the CLT, Federal Constitution of 1988, as well as state and local laws, which can be more stringent and more employee friendly.  Under the federal law, all state and local laws mimic the federal scheme and are permitted to provide more stringent requirements to protect employees and workers.  For example, the federal minimum additional overtime pay is 50% of the regular hourly rate, but it may be higher if established under the state or local laws.  Additionally, employers must be cognizant that collective bargaining agreements can also include a higher overtime compensation.  Another example, the Federal Constitution and its corresponding federal agencies implement a fixed minimum wage every year, but some states and local laws, as well as collective bargaining agreements, may place their own minimum wage on employers so long as the minimum wage is not inferior to the federal minimum wage. 

Best Business Practice in Brazil

Record keeping, especially payroll, is essential in Brazil because if an employee brings a grievance or complaint against an employer, it is the employer’s burden to demonstrate that the employee was properly paid in accordance with the law.  It is noteworthy to mention that payroll records should include holiday pay as required by law, as well as the 13th month salary as required by law.  Any payroll recordkeeping that falls short of the legal requirements compensation can create a huge risk for the employer.  The risk extends to companies who merge with or purchase another company in Brazil who did not employ the Brazilian employees before the acquisition.  Thus, if your company is considering a merger or purchase in Brazil, please ensure that you attain and review all payroll documents to ensure pre-acquisition compliance.

Keeping Up With Brazilian Trends

 Once your company is operating globally in Brazil, please be mindful that employees who receive emails and telephone calls after office hours may be eligible for overtime compensation under recent legislation enacted in January 2012.  Hence, many companies are instituting policies and procedures to ensure that the only emails sent by employees after the end of office hours are those that are both urgent and work-related.  

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* Since 1943, some laws in the CLT relating to employee rights (e.g. employee right to strike) have been amended.